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The earliest recorded inhabitants of modern-day Myanmar are the Pyu, who entered the Irrawaddy River from Yunan around the 2nd century BC. By the 4th century, several city-states were established and Buddhism became adopted in the area. Other groups of people subsequently began to settle in Myanmar. The Taungoo Dynasty initially unified the nation, and this unification was sustained into the reign of the Konbaung Dynasty. The British Empire conquered the entirety of Burma following three wars, and the land was later ceded to the British Raj. It was separated from India in 1937 and was granted a new constitution that gave many powers to the Burmese citizens. The Japaneseoccupied Burma in 1942, and it existed as a Japanese puppet state until 1945, when the British reclaimed the territory. The British owned Burma until 1948, when it became an independent country.

The first Myanma currency was issued by the Pyu and Mon people around the 5th century AD. In the 7th or 8th century, the Chandra dynasty of the Kingdom of Arakan began issuing its own currency. Afterward, no coins were issued until the 17th century, when King Bodawpaya authorized the issuance of coins imitating those of the Pyu and Arakan. The residents of Tenasserim also issued leadcoins during the time period. The kyat was introduced in 1852, but was later replaced by the Indian rupee, and then the Burmese rupee. The kyat was reintroduced for a short period of time before being replaced by the rupee once again. In 1952, the kyat became Myanmar's currency for the third time and is currently in circulation.

The first kyat was introduced in 1852 by the Konbaung Dynasty and was used until 1889, consisting of separate silver and gold currencies. It was divided into 20 pe. One pe equaled 4 pya, and the mu and mat were worth 2 and 4 pe, respectively. Nominally, 16 silver kyat equaled one gold kyat. The former had a value equal to the Indian rupee, which replaced the currency after Myanmar was ceded by India.

From 1942 to 1945, the Empire of Japan occupied Myanmar. Initially, a currency based on the rupee was established, but was replaced by the kyat in 1943. It was subdivided into 100 cents, even though no coins or notes were issued using the denomination. At the end of World War II, the second kyat was declared worthless and the Burmese rupee was reintroduced.

In 1944, the Burma State Bank issued banknotes with denominations of 1, 5, 10, and 100 kyat, followed by another issue of 100 kyat notes in 1945.

In 1952, bronze1 pya, cupronickel5 pya, 10 pya, 25 pya, 50 pya, and 1 kyat coins were issued. In 1966, the coins denominated in pyas became composed of aluminum. The 1 pya coins were last minted in 1966, the 5 pya coin in 1987, and the 10, 25, and 50 pya coins in 1991. In 1999, a new series of Myanma coinage was introduced, which consisted of a bronze 1 kyat, brass5 and 10 kyat, and cupronickel 50 and 100 kyat coins.

In 2008, the Myanma government announced that they would be issuing new 50 and 100 kyat coins. According to newspaper articles, the new 50 kyat coin would be made of copper and bear a new design on the reverse, while the new 100 kyat coin would retain its original composition, but bear a different design. Thus far, these coins have not been issued.

In 1953, the Union Bank of Burma issued the first series of kyat banknotes, which consisted of notes denominated at 1, 5, 10, and 100 kyat. These were similar in design to the final series of rupee notes, which were issued earlier that year. In 1958, a new series was issued, which introduced the 20 and 50 kyat notes. The 50 and 100 kyat banknotes were demonetized in 1964, allegedly carried out to combat black marketeering. Note production was granted to the People's Bank of Myanmar in 1965, introducing an issue of 1, 5, 10, and 20 kyat notes.

In 1972, the Union of Burma Bank took over banknote issuance, introducing notes between 1972 and 1979 with denominations of 1, 5, 10, 25, 50, and 100 kyats. These notes were printed by Security Printing Works in Wazi under direction from the German firm Giesecke & Devrient. On November 30, 1985, the 25, 50, and 100 kyat banknotes were removed from circulation without warning, though the public was allowed to exchange limited amounts of old notes for new ones. All the other notes in circulation at the time remained legal tender. On November 10, 1985, 75 kyat notes were introduced, the odd denomination possibly chosen to commemorate Ne Win's 75th birthday. These were followed by 15 and 35 kyat notes on August 1, 1986.

A 90 kyat banknote.

Only a few years after their introductions, in 1987, the government demonetized the 25, 35, and 75 kyat banknotes without warning or compensation, rendering a large percentage of the country's currency worthless. The resulting economic disturbances and other national factors led to serious riots and eventually a coup d'état by Saw Maung in 1988. On September 22, 1987, banknotes with denominations of 45 and 90 kat were issued.

After the country's name was changed to Myanmar on June 20, 1989, new notes were introduced. This time, the old notes were not demonetized, but simply allowed to fall into disuse through inflation as well as wear and tear. In 1990, 1 and 200 kyat notes were introduced. These were followed by 50 pya, 20, 50, 100, and 500 kyat in 1994, 5 and 10 kyat in 1995, 1000 kyat in 1998, and 5000 kyat in 2009.

In 2003, rumors of another demonetization swept through the country. The junta issued official denials and this time, the demonetization did not occur. In 2004, the sizes of the 200, 500, and 1000 kyat notes were reduced in size to make all Myanma notes uniform. Today, 50 pya, 1 and 5 kyat notes are rarely found in circulation, due to their low values.

Since 2001, the official exchange rate has varied between 5.75 and 6.70 kyats per United States dollar. However, the black market rate, which more accurately takes into account the standing of the national economy, has varied from 750 to 1335 kyats per USD. These black market exchange rates typically decrease from December to January, during the peak of the Myanma tourist season.